UBS AG plans to open five U.S. offices this year dedicated to serving very wealthy clients as it strives to double its market share in that category, according to its U.S. private banking unit's new chief executive.
UBS opened a pilot office in New York seven months ago. Craig Walling, who was named the private bank CEO at UBS Wealth Management U.S. this month, said it intends to open others in Stamford, Conn., Atlanta, Chicago, Los Angeles, and San Francisco.
The offices, which will cater to individuals with more than $10 million to invest, are designed to bring together brokerage, trust, and private banking services, Mr. Walling said. "The attempt is for the first time to provide a seamless offering at the client level."
UBS would like a bigger share of this market, Mr. Walling said. In 2004 it formed the private wealth management business to target that group, and since then it has more than doubled its assets under management, to $106 billion at the end of last year, according to its annual report.
The company now has a 3% share of the ultra-high-net-worth segment's invested assets, Mr. Walling said, citing research from VIP Forum, an association of wealth management executives based in Washington and London. The company wants to double its market share by 2010, Mr. Walling said.
There are 140,000 U.S. households with more than $10 million of assets under management, and UBS expects that number to triple over the next 10 years. Over the next three to four years it plans to open offices in the country's "major marketplaces," Mr. Walling said.
Private bankers and wealth advisers with brokerage backgrounds staff the New York office; the advisers go through a yearlong, in-house training program covering a range of wealth management strategies, he said.
"The training is soup to nuts, a university-level curriculum designed to take an experienced broker or adviser and bring them to the level of a capable wealth adviser over one or one and a half years," he said.
About 140 advisers have completed the program so far, Mr. Walling said. The private bank plans to have 400 dedicated wealth advisers by 2010, according to the annual report.
As part of its goal of increasing its share of the U.S. high-net-worth market, UBS bought the PaineWebber Inc. brokerage firm in 2000. UBS integrated that company and then turned to creating a "holistic platform," Mr. Walling said. "Over the last four years, we've spent a lot of time, talent, and money so that we can be relevant, and now it takes on a physical dimension" through the new offices.
While UBS is targeting those with $10 million or more to invest, that does not mean the clients have to have that amount immediately. The company would go after a 55-year-old entrepreneur, for instance, who might have just $1 million in the bank but will be able to sell his company for $100 million in 10 years.
Another key target market is corporate executives, Mr. Walling said; a typical client might hold options and restricted stock that they intend to cash in 15 years from now.
"They may be a $2 million client today with $20 million potential tomorrow," he said.
Before joining UBS in 2005, Mr. Walling was the president and CEO of U.S. Trust Co. in Greenwich, Conn. Before that he had been the president and CEO of Charles Schwab, Europe.
Mr. Walling said that his new position puts him in the middle of a fragmented and fiercely competitive market to serve the wealthiest Americans.
"The best minds in the world are now engaged in figuring out who's going to win," he said. "It's completely open space."
